IFC’s appraisal considered the environmental and social management planning process and documentation for the Project and gaps, if any, between these and IFC’s requirements. Where necessary, corrective measures, intended to close these gaps within a reasonable period of time, are summarized in the paragraphs that follow and (if applicable) in an agreed Environmental and Social Action Plan (ESAP). Through implementation of these measures, the Project is expected to be designed and operated in accordance with Performance Standards objectives.
PS 1: Assessment and Management of Environmental and Social Risks and Impacts
Environmental and Social Assessment and Management System (ESMS). Edita identifies and manages E&S risks and impacts associated with its operations through compliance with applicable country-level E&S regulatory requirements and adherence to ISO management standards on environment, occupational health and safety, and food safety. Edita has a corporate Safety, Health, and Environment (SHE) policy, which generally aligns with the PS1 objectives and implements a corporate ESMS called Risk and Environmental Management System (REMS) across all the factories to support achieving ISO certification. All six Edita factories in Egypt and Morocco have completed regulatory environmental impact assessments (EIA) and secured environmental permits, which Terms and Conditions of the environmental licenses and permits have been integrated into its ESMS. The factories in Egypt are certified ISO 14001 (environment), ISO 45001 (health and safety), ISO 9001 (quality), and ISO 22000 (food safety). The factory in Morocco has partially implemented the corporate ESMS. Consistent with the commitments described in SHE policy to adhering the ESMS to international ISO standards, Edita will fully implement the corporate ESMS in Morocco’s factory and certify it to ISO 14001 and ISO 45001, as well the newly established factories as part of the regional expansion. Going forward, Edita will update and align its corporate E&S management system manual of procedures in meeting IFC PSs and WBG General and Sector EHS Guideline for Food and Beverage Processing performance-based requirements (ESAP#1).
Management programs. As part of the corporate REMS, Edita implements EHS procedures and work instructions to meet its E&S policy commitments, country-level E&S legal and regulatory requirements and ISO certification requirements. The EHS procedures include risk assessment, permit to work, working at height procedure, lock-out/tag-out, monitoring and reporting, continuous improvement, incident investigation, contractor management, among others. The latest ISO 14001 and 45001 certification audit report in 2022 for the factories in Egypt showed a satisfactory level of implementation of these standards with minor non-conformities identified, which have been resolved since the receipt of the audit reports. The factory in Morocco was recently established and is implementing the REMS procedures in a phased approach based on operational risks priorities, as agreed with Edita’s EHS corporate function. To strengthen its E&S MS against IFC PSs in relation to its proposed regional expansion, Edita will establish and complete an E&S screening procedure for any asset acquisition, either brownfield or greenfield (ESAP#2). The E&S considerations will include land acquisition; community health and safety; security; among others.
Organizational Capacity/Competency. At the corporate and factory level, Edita has established an EHS function to implement its EHS/HR/SC and social requirements. At the corporate level, the QEHS director is ultimately responsible for EHS performance and is supported by an EHS manager. Each factory has an EHS deputy manager along with an EHS supervisor and coordinators covering all shifts to manage the factory EHS performance and in turn reports to the corporate EHS function. The distribution activities in Egypt and Morocco have a dedicated EHS team that ultimately reports to the QEHS director. Edita’ EHS function in Egypt and Morocco have in total 38 staff with EHS responsibilities and relevant qualifications. In addition, as per country-level regulatory requirements, each factory has an OHS committee which has representation by workers and senior management to assess EHS performance. Edita will implement a similar EHS structure for its proposed regional expansion i.e., assignment of a factory-level deputy EHS manager supported by a team of EHS supervisors. Edita has an HR function led by a director who is supported by a team of 7 professionals handling sales team, operations, security, admin and government and public affairs. Each factory has two HR resources responsible for daily workers’ management.
Training. Edita implements EHS training as part of the REMS. This includes induction for new recruits, job-specific training, and EHS general training. An annual training plan covering EHS operational controls, risk assessments, permit-to-work system, lock-out/tag-out, incident report, etc. is implemented. Based on Edita’s environmental, OHS and resource efficiency Key Performance Indicators, the effectiveness of this EHS training plan is reviewed and amended. As part of the EHS department targets, Edita has set a training target of providing 6 hours of EHS training per employee per year and tracks progress.
Emergency Preparedness and Response Plan (EPRP). Edita has implemented an Emergency Preparedness and Response Plan (EPRP) with defined risk scenarios, response procedures, maintenance routine, and roles and responsibilities for its factories and distribution centers in Egypt and Morocco. It administers at a minimum two emergency drills at each production facility each year. In Egypt, the emergency response and firefighting arrangements for the factories and distribution centers are subject to review and approval by the civil defense authority, with requirements of undertaking emergency drills and providing training to the workforce. All the factories in Egypt and Morocco have an on-site health clinic staffed with a nurse/paramedic during all shifts. During the field appraisal, firefighting arrangements observed included fire alarms, smoke detectors, fire hydrants, fire extinguishers (carbon dioxide and/or dry powder) depending on the fire risk of the area, emergency exit, and assembly signs.
EHS Monitoring and Reporting. Edita monitors its EHS/social performance as part of its corporate and factory-level ESMS. This includes daily/weekly EHS and food safety inspections; monthly EHS key performance indicators (KPIs) reporting and review meetings; monthly EHS meetings with factory management; and quarterly EHS performance review meetings with corporate senior management. KPIs monitored monthly and reviewed by EHS management includes lost time incidents rate, first aid cases, accidents, corrective action and preventive action closure rate, water and energy consumption, waste generation, and training hours per employee, among others. The corporate EHS function undertakes internal audits based on audit plan and receives annual third-party certification audits for ISO 14001 and 45001 for the factories in Egypt. Further, Edita prepares and discloses an annual sustainability report (https://edita.com.eg/sustainability/) addressing environmental, social, and governance commitment, performance, and continuous improvement plans. Overall, the company’s E&S management systems including operational controls, resources, and monitoring are aligned with the E&S risks and impacts of its operations.
Supply Chain. Edita implements a supplier selection process that integrates quality, environmental, and social commitments and developed a supplier environmental and social requirements procedures to qualify supplier selection. New local suppliers are assessed based on documents review and on-site inspections, and existing suppliers are monitored and evaluated through annual audits and evaluations. Going forward, Edita will (i) develop a Supplier Code of Conduct with E&S requirements aligned with PS2/PS6 requirements to be signed and integrated as part of the commercial agreement with all third-party suppliers; (ii) integrate explicit E&S assertive and restrictive covenants in commercial agreements; (iii) implement sustainable sourcing questionnaire with third-party suppliers involved in “high-risk” agro-commodities (particularly cocoa butter, cocoa powder, and palm oil) to confirm sustainable production practices. The current supplier’s evaluation process includes on-site inspection activities undertaken by Edita’s quality team. To enhance the E&S screening and inspection competency, Edita will provide training on E&S supply chain requirements aligned with IFC PSs supply chain requirements to its quality team and integrate it as part of the annual training plan (ESAP#3).
PS 2: Labor and Working Conditions
The project has a total of 6,810 workers; 6,523 in Egypt and 287 in Morocco. This number excludes outsourced workers. The number of workers is expected to increase by 580 workers with the proposed local and regional expansion. In Egypt and Morocco, females are 4% and 35% of this number. Edita outsources workers through worker agencies based on seasonal need.
Human Resources (HR) Policies and Procedures. Edita employee handbook encompasses policies around employment relationship, non-discrimination and equal opportunity, anti-sexual harassment, promotion policy, holidays and annual leaves, recruitment, attendance, overtime, disciplinary, training and development and performance management. Going forward, Edita will include statements on compliance to national legislation regarding child and forced labor and freedom of association to its existing HR policies and procedures and align their policies and procedures with IFC PS2. These policies and procedures will be communicated to the workers through various channels. (ESAP#4).
Working Conditions and Terms of Employment. The majority of Edita direct workers have fixed term contracts renewed on an annual basis (65%). Workers have social insurance as per the national labor legislation and private medical insurance. Workers are also provided with free meals and transportation.
Workers Organization. For Egypt and Morocco, Edita conducts monthly “in touch” meetings at all the factories and distribution centers to provide a forum for workers to discuss their workplace concerns. These meetings are documented and presented to the CEO on a regular basis. There are presently no workers union recognized in any of Edita’s factories in Egypt and Morocco. As per the Labor law, such worker’s organizations are not compulsory in both countries. However, Edita’s HR policies do not make a reference to freedom of association.
Workers Grievance Mechanism. Edita operates an anonymous whistleblower system called “I-voice” which is managed by its compliance function. Workers can access the system through a barcode communicated through various means. Going forward, Edita will develop and communicate a documented WGM policy and procedure in line with IFC PS2 requirements including a clear statement on non-retaliation and access to third party workers. As part of its digitalization strategy, it will also improve worker sensitization to the grievance mechanism bearing in mind that not all workers are comfortable using the application. The amended WGM will be communicated to all workers including third party workers through induction training, notice boards and various sensitization activities (ESAP#5).
Workers Engaged by Third Parties. Edita uses registered labor agencies to hire seasonal workers (less than 20% of the workforce) to support logistical tasks at its distribution center and shopfloor-related activities (e.g., loading/unloading). These agencies have a contractual requirement to align their HR/OHS policies with Edita HR policies and procedures, such as health insurance, free meals, and transportation. Edita also has a contractor management procedure that includes adherence to country-level labor and OHS requirements. Edita will review its contractor management procedure to further align with IFC Good Practice Note on Managing Contractor’s E&S Performance. Identified areas of improvement during this appraisal relates to contractor prequalification, evaluation, and selection; E&S reactive and proactive monitoring, auditing, and reporting; explicit legal covenants; training; access to grievance mechanism (ESAP#6).
Occupational Health and Safety. Edita implements OHS controls as part of the ISO 45001 management system and continuously monitors OHS leading and lagging indicators. Operational hazards at the workplace are assessed and controlled according to a risk assessment matrix that includes the required control measures. The lost time incidence frequency rate (LTIFR) is 0.28, which is within the industry benchmark. All workers who have contact to food material undergo mandatory annual health check-ups. The company performs annual OHS measurements, which address noise, air quality (particulate matter), illumination, and heat stress. The OHS measurements in 2022 showed results compliant with the statutory limits and WBG EHS Guidelines. It identified noise level exceedance in some workstations, air quality exceedance in one factory (E10) at the sugar milling station, and elevated heat stress during summertime at some workstations. Personal protective equipment (PPE) is provided to workers (e.g., ear plugs and masks) at the respective workstations. Corrective actions were recommended in 2019 to address heat stress, whereas the company implemented engineering and administrative measures (e.g., improved ventilation system and increased breaks during the work shift); the effectiveness of these measures will be reviewed and addressed as part of IFC supervision activities of the previous investment. Going forward, Edita will be centralizing its sugar milling activities at one factory (E8), which is equipped with an adequate dust collector and ventilation system (ESAP#7). Alternatively, Edita will install a dust collector and ventilation system at the sugar milling station of the E10 factory. In addressing elevated noise levels, Edita will review and implement the OHS hierarchy of risk controls at the respective workstations (elimination-substitution-engineering measures-administrative measures-PPE).
Supply Chain. Contextually the risk of child/forced labor exposure in Edita's supply chain is low in the countries where it operates. As part of Edita’s supplier selection process, it implements a supplier social requirements procedure, which includes requirements on the prohibition of child labor. With respect to the high child/forced labor exposure risk in the sourcing of cocoa derivates and palm oil, Edita will implement additional E&S supply chain management measures as defined in ESAP#3 above to further align with IFC PS2 supply chain requirements.
PS 3: Resources Efficiency and Pollution Prevention
Resources consumed for Edita’s factories include water, electricity, and natural gas. Edita optimizes its resource efficiency at its factories in reducing consumption of energy, water, waste generation consistent with PS3 objectives. Resources efficiency commitments, resources use, and optimization initiatives are communicated in its annual sustainability report (https://edita.com.eg/sustainability/).
Energy and water. Water, electricity, and natural gas are grid/utility connected for the factories in Egypt and Morocco. Edita tracks monthly resource consumption and waste generation for each factory, which is part of the factory’s monthly scorecards. The scorecards are used to benchmark performance and identify areas of improvement. Edita has recently implemented resources reduction initiatives and operational optimization measures (changeover/startups/stoppages period/etc.) which resulted in reduced resource consumption. The water, electricity, and natural gas consumption per ton of production has reduced between 2020 and 2021, from 3.48 m3 to 3.35 m3 for water, 0.58 kWh to 0.47 kWh for electricity, and 86 m3 to 81.2 m3 for natural gas.
Air quality and noise. The main air pollutants generated by the facilities are from boilers that run on natural gas. As part of its regulatory environmental measurements, point source air emissions from boilers stack are measured. Measurements undertaken in 2022 showed results compliant with country-level regulatory statutory requirements and WBG EHS Guidelines. Ambient noise impact is low; all factories are located within industrial zones and do not produce audible sound outside of the production factory premise.
Wastewater Management. The production process generates industrial wastewater that is characterized by high organic loads and sediments. Two of the five factories in Egypt have an on-site wastewater treatment plant while the factory in Morocco is within an industrial eco-park serviced by a central industrial wastewater treatment plant. Annual environmental measurements show the treated wastewater is compliant with country-level regulatory statutory limits and WBG EHS Guidelines. With respect to the three factories that lack in-situ pre-treatment/wastewater treatment plants (E7, E8, and E15), the industrial wastewater is discharged to municipal drainage. IFC’s previous investment in 2019 requested Edita to install wastewater treatment plants at these three factories. This ESAP item from the 2019 investment has been adjusted for this proposed investment and fully accounted in the CAPEX financed by IFC (ESAP#8).
Waste management. Waste generated from the facilities in Egypt and Morocco are stored on-site and disposed of through licensed solid and hazardous waste contractor. As part of the REMS, Edita tracks and maintains waste manifests to confirm the final destination of the waste disposal.
PS 4: Community Health, Safety and Security
Food safety management. All products produced by Edita adhere to food safety and quality standards. All the factories met the National Food Safety Authority requirements in Egypt and Morocco, achieved and maintains ISO 9001 (quality) and ISO 22000 (food safety).
Fleet Management. Edita uses vehicles for three purposes. Workers are transported through 31 leased buses covering worker transportation for 3 shifts per day. Finished goods are transported from distribution centers to retail through a 854 company owned and branded trucks. Transportation of final goods from factory to warehouse and customs clearance is undertaken by contracted trucks from three companies. Edita has a vehicle safety and traffic management procedure addressing its own fleet of vehicles. The procedure includes requirements on driver fitness; vehicle safety, inspection, and maintenance requirements; defensive driving training; among others. During appraisal, it was observed Edita’s owned trucks and workers’ buses are in good condition and have a hotline exhibited on the vehicle for collecting complaints on drivers’ behavior. EHS lagging indicators show elevated road traffic accidents per year, which is compounded by the contextual driving risk of road traffic accidents in Egypt and the large number of trucks in operation. Going forward, Edita will enhance its road traffic safety measures by applying phased in-vehicle monitoring system starting from cities showing higher traffic accidents rate; establish fleet management register to track and monitor KPIs such defensive driving training, pre-trip debriefs of drivers, number of driving violations, rewarded/penalized drivers, and number of vehicle collisions; and a continuous improvement register. Edita will also update (or develop) road traffic safety procedure for the contracted vehicles with proactive and reactive measures, including monitoring and reporting requirements (ESAP#9).
Security Personnel. Edita has not experienced any material security events. The security arrangement employed in the facilities and distribution centers comprises fences and gates for access control, CCTV cameras, and unarmed security guard directly hired by Edita. As part of its proposed regional expansion, should the E&S screening procedure identify a development within a country/area showing elevated security risk, Edita will develop a security management plan aligned with the IFC Good Practice Handbook - Use of Security Forces: Assessing and Managing Risks and Impacts and provide (ESAP#10).
PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources
Supply Chain. As part of the production process, Edita requires the use of cocoa derivates and palm oil, which are produced in West Africa and Southeast Asia. Contextually, these commodities are associated with high deforestation exposure risk in the supply chain. As defined in ESAP#3 above, Edita will complement the current E&S supply chain management with additional due diligence actions to address deforestation risk cocoa derivates and palm oil.
